Women-founded startups raised 1,9% of all VC funding in 2022

Last year, US startups with all-female teams received 1,9% (or about $4.500 billion) of the nearly $238.300 billion in venture capital allocated, according to the latest data from pitchbook.

This percentage represents a notable decrease compared to the 2,4% obtained by teams made up exclusively of women in 2021. The decline was to be expected, given the economic climate last year. In fact, the last time all-female-led startups raised such a low percentage of funding was in 2012, another period of declining funding caused by economic uncertainty and an election.

Last year, all-female teams raised 1,9% of VC funding, a percentage that shot up to 17,2% when the team was mixed. This trend has held steady for at least a decade.

"When the economy tanks, discrimination seems justified", Explain Ruth Fox Blader, a partner of Anthemis Group. “Managers are doubling down on what they perceive as 'safe' and 'boring'. Investing in women is still perceived as high risk. LPs need to look beyond manager diversity and into their investment portfolios if we want to change this industry; 1,9% is deplorable.”

However, there is good news.

Capital invested in women-founded companies, including mixed teams, is at its second-highest level, second only to the record-breaking year of 2021. The deal count for all-female-founded teams also remains at its second-highest (with 1.001 deals closed), just behind the 1.190 closed in 2021. The Bay Area remains the top location for teams made up exclusively of women get funding, closely followed by New York. The Big Apple remains, however, first for all-female teams in terms of deal count, followed by the Bay Area and Los Angeles.

In addition, 1,9% of the venture capital funds recruited by all-female teams in the US is slightly better than what their female counterparts received in Europe, a percentage that currently hovers around 1,1%. Although culturally separate, Europe and North America are socially united when it comes to gender discrimination.

Olivia DeRamus, founder of the social network Communia, says that until these systemic problems are addressed, especially in the investment sector, it will continue to be difficult to move towards equality.

"There are still deep-rooted biases against women, and since female founders often create solutions to problems we experience firsthand, our companies may solve a need that male investors don't understand or appreciate," DeRamus said. "It's a constant battle just to be taken seriously, even if our companies have even more compelling growth, traction, and metrics than startups led by male founders."

Kelly Ifill, founder of fintech Guava, said she was not surprised that funding for female founders was declining. "Changing those numbers requires a lot of thought to overcome unconscious biases, consider 'non-traditional' origins and places, and frankly be more open", Dijo. “Companies are exclusive by definition. It is a fact that women-led businesses have a higher long-term success rate. If investors really look at the data, that's the fact."